In many ways, the journey to become a better and successful forex trader never ends, as it’s this relentless approach and quest to minimise losses that separates high achieving investors from less successful operators.
Remember, a staggering 70% of forex traders record losses on average, so constantly striving to be a better trader can have a significant impact on your long-term success.
In this post, we’ll look at how you can become a better forex trader over an extended period of time!
- Experiment With Different Strategies and Currency Pairs
While theoretical knowledge is crucial when learning how to trade forex, this means little unless you’re able to translate this into practical experience.
One way to achieve this is to utilise a so-called “demo account”, which provides you with access to a real-time and simulated marketplace where you can experiment with alternative investment strategies.
You can utilise a demo account for between three and six months, while this also provides an opportunity to identify a better range of currency pairs for your forex trading journey.
This is important, as there are different categories of currency pair (major, minor and exotic), each of which boasts different levels of liquidity and can be combined to minimise risk and optimise reward over time.
- Invest in Research and Mentoring
As we’ve already touched on, the forex market (and its underlying trends) are constantly evolving, and keeping pace with this rate of change is crucial if you’re to succeed over time.
So, you’ll need to research the market and the impact of macroeconomic factors on a regular basis while also studying relevant data releases and retaining a deterministic outlook that helps you to recognise the universal rules that shape the fx space.
Similarly, we’d also recommend seeking out a potential mentor when starting out, ideally in the form of a friend or colleague who has experience of the marketplace and its fundamental principles.
Or, you could engage in social trading, which enables you to follow and copy the strategies of successful traders while engaging and sharing ideas with like-minded individuals.
- Keep a Record of Your Trading Efforts
You may well have heard of trading journals as an investor, which can be used to keep a record of each individual trade that you commission over time.
The reason for this is simple; as it can help to record your successes and failures over time, enabling you to learn directly from individual mistakes and chart your progress as you develop your knowledge base.
Similarly, you may be able to identify patterns in terms of how and when you trade, some of which may be positive and others that may have a negative impact on your portfolio.
Even on a fundamental level, journals of any description are crucial to self-improvement and the learning process, so it’s definitely something that can offer value in the world of forex trading.